Trash company to pay legal fees in Los Al suit

LOS ALAMITOS—The trash hauling company involved in a lawsuit filed by a group of local residents will pay the attorney fees for its co-defendants: the city of Los Alamitos and three of its council members.

Consolidated Disposal Service will pay to defend Los Alamitos and council members Troy Edgar, Marilynn Poe and Ken Stephens in a lawsuit by Citizens for a Fair Trash Contract, city officials announced this week.

The lawsuit, filed Oct. 27, alleges that council members awarded the multi-million dollar trash hauling contract as payback for contributions made to their campaigns. The lawsuit seeks to overturn the council’s contract with Consolidated, CDS, scheduled to take effect Jan. 1.

“The city and the council members will have their own separate legal counsel that has been selected by the city, not CDS,” Peg Mulloy, spokeswoman for Republic Services, which owns Consolidated, wrote in an e-mail. “We think the case is wholly without merit and will vigorously defend the interests of CDS and intend to work closely with the city’s retained counsel in the defense of the action.”

The lawsuit claims the city violated its own code in the bidding and evaluation process created to select a new trash company. It also claims that Poe, Stephens and Edgar, and unspecified defendants, “each had a prohibited financial interest in the decision to award the trash contract to CDS.”

The lawsuit alleges that prominent businessman George Briggeman Jr., Consolidated and other individuals and entities contributed at least $36,500 to promote the campaigns of council members Edgar, Poe and Stephens in 2006 and 2008 “with the express or implied agreement” that they would vote to approve a contract with Consolidated.

The trash contract has been a hot-button topic in City Hall and the most recent election. Edgar called the lawsuit, filed a few days before Election Day, “the ultimate hit piece.” Several city officials said then they expect the lawsuit to be dropped after the elections.

The agreement from Consolidated to pay for the council members’ defense is raising new concerns about conflict of interest.

“They’re accepting money from the company they voted to give the contract,” said Benjamin Pugh, the attorney representing the Citizens group.

Pugh said the contract with Consolidated contains language that indemnifies the city and its officials from any claim “caused by the award of this agreement.” Those words were not in the original contracts sent out to bidding companies.

“They threw in this language,’’ Pugh said. “They knew the awarding of the agreement was fishy.’’

Pugh said it did not make sense for CDS to indemnify the city and its council members.

Mulloy said the city’s contract with Consolidated does include a clause she called “a standard provision” that requires the company to pay the legal costs in a case “where a lawsuit is filed in court regarding the award of the contract.”

City attorney Sandra Levin wrote in an email that the revision to the contract was made after “a challenge to the contract award was threatened at a public meeting.”

“The city wanted to assure that the costs of defending any such frivolous lawsuits would not be borne by the taxpayers,” Levin wrote. “It is prudent risk management and one would expect the majority of the residents of Los Alamitos – as opposed to the few who are suing – to be pleased that their representatives had the foresight to avoid the expense of meritless litigation.”

On the Citizens’ group end, Pugh said court-related fees, such as court filings, will be paid by the group, led by former councilman Art Debolt. But attorney fees will be withheld until the end of the case, and if the Citizens group wins, those fees will be demanded from the city or Consolidated. Pugh is a partner with Irvine-base Enterprise Counsel Group, which was awarded attorney fees on a similar basis last summer after representing two Irvine council members who successfully sued the Orange County Great Park Corp. to access documents.

The citizens group argues that the garbage contract did not go to the lowest responsible bidder, as required by the criteria, and the contract will cost Los Alamitos residents $6.5 million over the next decade. The group argues that the city violated its own rules in, among other things, dropping the lowest bidder.

City officials dispute the $6.5 million number as “a fictitious number” quoted by one company they suspect would have raised the price in later years. City officials have contested the allegations repeatedly, saying the city complied with its rules and the proposals were scored in accordance with the protocol established.

City Manager Jeff Stewart posted a memo on the city’s website stating that the new contract translates to $11.88 a month per resident—the third lowest residential collection rate in Orange County.

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